McDonald's

McDonald's is the world's largest fast food retailer. According to its website, the company has over 36,000 restaurants in more than 100 countries, and "1.9 million people work for McDonald's and its franchisers."[1] (See Labor Issues below for more information on whether people who work at a McDonald's are employees of McDonald's.) McDonald's states that more than 80 percent of its restaurants are franchised.[2]

McDonald's had total revenues of $27,44 billion in 2014, with net income of $5.59 billion.[3] It is publicly traded under the symbol MCD.

McDonald's was the United States' largest purchaser of beef and the second largest purchaser of poultry as of 2007.[4]

Ties to the American Legislative Exchange Council

McDonald's was a corporate member of the American Legislative Exchange Council (ALEC) until 2012, when it told Mother Jones in April of that year that it had "made the business decision not to renew in 2012."[5] Previously, as reported by the Huffington Post, McDonald's spokesperson Pat Harris had insisted to Color of Change in a letter discussing ALEC that McDonald's had not been involved with ALEC's "model" voter ID bill and that it did not "participate or have voting authority on any ALEC task force or Board that reviews or takes action on election-related model legislation or resolutions" but had made no move towards distancing itself from ALEC.[6][7] But Ed Conklin, Senior Director of Governmental Affairs for McDonald's, had represented McDonald's on the Executive Committee of ALEC's Commerce, Insurance and Economic Development Task Force, in which corporate lobbyists vote as equals alongside elected state leaders on labor, economic, and consumer issues.[8]

ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.

Political Influence

Membership in Influential Trade Groups

McDonald's is a member of the International Franchise Association (IFA), a U.S.-based trade group for franchisers, and as of 2014 had a representative on the IFA's Executive Board. The IFA lobbies for laws and policies favorable to franchisers, including opposing the NLRB joint-employer rule, fighting various provisions of the Affordable Care Act, and opposing efforts to raise the minimum wage.

Political Contributions

McDonald's political action committee (PAC) spent a total of $1,071,627, including $735,875 to individual candidates, at the federal level in the 2014 election cycle. Of candidate contributions, 55 percent went to Republicans and 45 percent to Democrats.[10]

In addition to making contributions to dozens of individual candidates and to numerous Republican and Democratic PACs, McDonald's also made the following contributions to industry and trade groups:

Federal Lobbying

McDonald's reported $2.1 million in federal lobbying spending in 2014, including $590,000 to the outside firms Brownstein, Hyatt et al; Miller and Chevalier; and Gray Global Advisors. Its spending has increased significantly since 2009, exceeding $1.2 million annually from 2010 through 2014. Twelve of the company's 17 lobbyists have "revolving door" profiles in the Center for Responsive Politics' Open Secrets database.[11]

Fiscal cliff negotiations 2014 Senate Budget Resolution Impact of sequestration; H.R.684-Marketplace Fairness Act, to improve the States' rights to enforce the collection of State sales and use tax laws, and for other purposes S.336-Marketplace Fairness Act, A bill to restore States' sovereign rights to enforce State and local sales and use tax laws

Regulatory implementation of the Patient Protection and Affordable Care Act of 2010

Banking

Payroll card issues before the CFPB

Public Subsidies

Based on data collected by Good Jobs First, McDonald's received at least 42 state and local subsidies with a value of $3,978,824 from 2003 through 2013. These subsidies included property tax abatements, tax credits and/or rebates, training reimbursement, an enterprise zone credit, and tax increment financing.[12]

In 2008 and 2009, the federal government provided McDonald's with loans, loan guarantees, and bailout assistance with a value of $203,500,000.[12]

In addition to these direct subsidies, McDonald's also receives indirect subsidies in the form of public assistance for its low-paid workers.

A 2013 study by researchers at the University of California-Berkeley found that "[m]ore than half (52 percent) of the families of front-line fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole," at a cost of "nearly $7 billion" per year. The report notes:

"When employers pay poverty wages, workers must turn to public programs to meet their basic needs. Earned income tax credits, publicly subsidized health insurance, income support and food subsidies allow these working families to bridge the gap between their paychecks and subsistence. This is the public cost of low-wage jobs in America."[13]

The National Employment Law Project estimated in 2013 that McDonald's share of that cost is approximately $1.2 billion per year, in effect a public subsidy for the company. That year, McDonald's had $5.46 billion in profits and spent $5.5 billion on dividends and stock buybacks.[14]

Labor Issues

In March 2015, 28 McDonald's workers from 19 cities filed complaints over burn injuries with the Occupational Safety and Health Administration (OSHA) as part of a campaign for increased safety. According to Bloomberg Business, "The workers allege that McDonald's safety standards aren't always enforced. They say they aren't given proper training or equipment to handle hot oil and grease in particular. Several say there are no grease aprons available, and only latex gloves keep the food safe, without regard to employees' own safety." One worker commented, "Once I burned my arm so badly that I now have a scar, but when I asked my manager for burn cream, she just said, 'Put mayonnaise on it, you'll be good.'"[15]

McDonald's released a statement in response, saying that it is "committed to safe working conditions" and would "review these allegations."[15]

A national survey of fast food workers by Hart Research Associates in 2015 found that 87 percent reported being injured on the job in the previous year, with 78 percent saying they had been injured multiple times; 79 percent of fast food workers reported being burned in the job in the previous year. Pressure from managers to work quickly and having too few staff were cited as the top contributing factors by burn victims.[16]

Former Workers File Suit Alleging Racial Discrimination (2015)

A group of former McDonald's workers filed a civil rights lawsuit against McDonald's in January 2015. As described by Reuters, "Nine African-American and one Hispanic worker claimed they were subjected to "rampant racial and sexual harassment" by supervisors at three restaurants run by McDonald's franchisee Michael Simon, who operates as Soweva Co." The suit also alleged wrongful termination. The workers' claims included allegations that "Soweva supervisors told the mostly African-American staff it was 'too dark' in the restaurants, and that it was necessary to replace employees to 'get the ghetto out of the store.'" Speaking to reporters, one plaintiff "said one supervisor touched workers inappropriately and sent them naked photos of himself."[17]

BBC News reported on January 22, 2015 that McDonald's had yet to comment on the suit, but "issued a general statement, saying: 'McDonald's has a long-standing history of embracing the diversity of employees, independent franchisees, customers and suppliers, and discrimination is completely inconsistent with our values. McDonald's and our independent owner-operators share a commitment to the well-being and fair treatment of all people who work in McDonald's restaurants.'"[18]

On July 28, 2014, the general counsel of the National Labor Relations Board (NLRB) ruled that McDonald's is a joint employer and authorized complaints in 43 cases against McDonald's.[19] The ruling means that McDonald's "could be held jointly liable for labor and wage violations by its franchise operators," according to the New York Times,[20] and may also "give employees more leverage to unionize."[21]

In response, "McDonald's said that its assistance to its more than 3,000 franchisees doesn't establish a joint employer relationship as described by the NLRB" and "vowed to fight the decision," according to the Washington Post.[22] Trade groups including the National Restaurant Association (NRA) and the National Retail Federation denounced the ruling as harmful to businesses. An NRA spokesperson said, "The net effect is counterproductive and will indeed create 'big business.'"[21]

In December 2014, the NLRB's Office of the General Counsel filed complaints against McDonald's and some franchisees "in 78 cases claiming that McDonald's workers across the country were fired or intimidated for participating in union organizing and in a national protest movement calling for higher wages." A spokesperson for the company said, "These allegations are driven in large part by a two-year, union-financed campaign that has targeted the McDonald's brand and impacted McDonald's restaurants," and that McDonald's would fight the complaints.[23]

In March 2014, McDonald's workers in New York, California, and Michigan filed a total of seven lawsuits "against the company and several franchise owners, asserting that they illegally underpaid employees by erasing hours from their timecards, not paying overtime and ordering them to work off the clock," according to the New York Times. The Michigan lawsuits also argued that the company's "requirement that employees pay for their uniforms illegally reduced their pay below the federal minimum wage of $7.25 an hour."[24]

McDonald's released a statement in response, saying in part, "McDonald's and our independent franchisees are committed to undertaking a comprehensive investigation of the allegations and will take any necessary actions as they apply to our respective organizations."[25]

The plaintiffs' lawyers argue that the McDonald's corporation should be considered jointly liable for violations at McDonald's franchises, according to the New York Times. The company, "like many other fast-food chains with franchises, has argued in the past that it is not a joint employer and should not be liable for its franchisees' misdeeds on the ground that the franchised restaurants are independently run businesses."[24]

The suits had not been resolved as of March 2015.

CEO Made 580 Times Minimum Wage while Worker Pay Stagnated

In 2011, then-CEO Jim Skinner earned total compensation of $8.75 million, which according to Bloomberg News was 580 times what a person working full-time at the federal minimum wage would earn in a year. Even a worker in Chicago, Illinois, which at the time had a higher minimum wage of $8.25, "would need about a million hours of work -- or more than a century on the clock" to earn that sum. Bloomberg News found that the pay gap between workers and the CEO at McDonald's had doubled in the past 10 years. While the company's profits had recovered strongly since the financial crisis, Bloomberg News reported, "Shareholders, not employees, have reaped the rewards. McDonald's, for example, spent $6 billion on share repurchases and dividends last year, the equivalent of $14,286 per restaurant worker employed by the company."[26] Skinner's pay package increased to $27.7 million in 2012, which included a retirement payout.[27]

Target of Fast Food and Minimum Wage Protests

McDonald's has been a major target of campaigns to unionize fast food workers and to raise the minimum wage and increase benefits for low-wage workers since 2012. McDonald's restaurants have been picketed by one-day strikes associated with the "Fight for 15" and "Fast Food Forward" worker movements.[28][29]

The New York Times reported that at a March 2015 company conference in Las Vegas, a new marketing campaign "seems to be a sign that the company intends to do a better job of controlling its own message," and that one item on the conference agenda was “Change the conversation about McDonald’s: Counterattack brand disparagers with continuous positive news on food quality and employment image.”[30]

Working for Decades to Keep Pay Low for Teens

"McDonald's [has] long lobbied in the United States for a lower minimum wage for teenagers, who made up the large majority of the company's labor force," according to Good Jobs First.[29] In 1972, as the Nixon administration pushed for the inclusion of a "subminimum" wage for teenagers in a new minimum wage bill, Sen. Harrison Williams (D-NJ) noted that McDonald's founder Ray Kroc had made a $255,000 contribution to Nixon's re-election campaign[31] (approximately $1.4 million in 2015 dollars, according to the Bureau of Labor Statistics).[32] Sen. Williams "said at a news conference [...] that Ray Kroc, chairman of the McDonald's Corporation, was one of those who had been very effective in blocking passage of a new minimum wage bill," according to the New York Times.[31]

McDonald's is a member of the National Restaurant Association (NRA), which is a major player in campaigns at the state and federal level against raising the minimum wage, and which continues to claim that a wage raise would harm teenagers.[33]

Pay for Farmworkers

After its protests "forced Taco Bell to pay tomato pickers a penny more per pound," the Florida-based labor rights group Coalition of Immokalee Workers (CIW) started "pressuring McDonald's for a similar agreement." Instead, McDonald's joined the "Socially Accountable Farm Employer (SAFE) voluntary certification program." Launched in November 2005, SAFE is run by board members of the industry group Florida Fruit and Vegetable Association and an association grantee, the Redlands Christian Migrant Association (a childcare provider with no experience in labor issues). SAFE is represented by CBR Public Relations, one of McDonald's PR firms, which specializes in "activist response management." Intertek, a firm that "already performs safety audits for McDonald's," will evaluate SAFE members' compliance. SAFE "does not include any input from workers," "does little to address low wages," and "does not guarantee workers overtime pay or the right to organize." A CIW organizer said McDonald's joined SAFE "to protect their public image in place of making a change in our lives."[34][35]

Health Insurance

His 2004 Los Angeles Times article described California State Proposition 72 as "an initiative that would require large and medium-sized business owners to give health benefits to their workers. The leading corporate sponsor of the effort to block its passage is McDonald's.... The fast-food industry is the nation's largest employer of minimum-wage labor.... The fast-food industry is the nation's largest employer of minimum-wage labor.... Led by McDonald's, the industry has pioneered a workforce that earns low wages, gets little training, receives few benefits and has one of the highest turnover rates of any trade."

Other opponents of Proposition 72 included Burger King, Wendy's, Walgreen, Best Buy, Target, Sears, YUM! Brands (owner of Taco Bell, Pizza Hut and KFC), the California Chamber of Commerce, and the California Restaurant Association. The state legislature had already passed a bill in 2003, signed into law by then-Governor Gray Davis, that required larger businesses to offer health care benefits. But fast food companies, big box retail chains, and their allies spent millions of dollars to rescind the law through the initiative process. In their campaign to defeat the initiative, the same groups ran television ads relying on "scare tactics, distortions and ... fundamental misrepresentation(s) of Proposition 72," according to Schlosser.[36] Proposition 72 failed.

McDonald's head of U.S. communications, Michael Donahue, included "good news" about the restaurant chain's impact on local economies as part of a new, "proactive" corporate PR campaign, according to PR Week. In 2002, Donahue "held a summit of the 125 PR firms that work with McDonald's and its various owner-operators across the country, encouraging them to tell McDonald's story locally," reported PR Week. Donahue encouraged local owners and PR firms to showcase "studies in various markets that showed the economic impact" of McDonald's -- studies funded by the company itself. "Local owner groups can use such studies to show their contribution to the local community," while stressing that the company prioritizes social responsibility, Donahue said.[37] In June 2007, Time magazine reported that McDonald's was "lobbying dictionary publishers to change the meaning of the word McJob -- or remove it altogether -- on the grounds that it denigrates the company's employees." McJob is commonly used to refer to "an unstimulating, low-paid job with few prospects," according to the Oxford English Dictionary. McDonald's wants to redefine it as "a job that is stimulating, rewarding ... and offers skills that last a lifetime."[38]

McDonald's and Obesity

Following unsuccessful class actions against fast food retailers in the U.S. over obesity, McDonald's has sought to shield itself from future actions by promoting 'personal responsibility,' diversifying its menu options, and changing its advertising style. McDonald's announced its commitment to "balanced lifestyles" in April 2004. "Our customers were telling us that they wanted more choice and balance. We started working vigorously on the plan to pull things together. A lot of the stuff that was announced today was in the making for one or two years," Ken Barun, corporate VP for balanced lifestyles and CEO and president of the Ronald McDonald House Charities told PR Week.[39]

McDonald's announced it would "educate, assist, and engage consumers in ways that change individual behavior, resulting in better food/energy (calorie-in/calorie-out) balance in their lives." Initiatives included the "Go Active! Adult Happy Meal," which included a premium salad, bottled water and a pedometer. The program gained the endorsement of then-U.S. Secretary of Health and Human Services Tommy G. Thompson. "Having him there was a real endorsement for us and the work that we're doing. He's established [good] relations with our US president Mike Roberts," Barun told PR Week. McDonald's also promised to take an "industry-leading role" in working with Health and Human Services to determine the best ways to communicate nutrition information to consumers.[40]

Celebrity Endorsements

In November 2004, PR Week reported that McDonald's head of U.S. communications, Michael Donahue, is "an adherent of using third-party endorsers." Donahue "had seen firsthand the value of using third-party endorsers" when McDonald's "was fighting a battle over the role its packaging played in waste-disposal problems in the late 1980s and early '90s." He used that approach in the company's "balanced lifestyle" PR campaign: "McDonald's aligned itself with Paul Newman as it introduced its new salads last year. Salads were rolled out in April with a New York press conference featuring Newman," reported PR Week. [1] Additional luminaries were enlisted to pitch McDonald's new Fruit & Walnut Salad in 2005. The campaign's aim was to associate the salad with the celebrity cache of young, healthy, thin and hip superstars. McDonald's tied the announcement of the salad to its sponsorship of Destiny's Child world tour, a musical act with a huge teenage audience that McDonald's sought to tap and impress with their musical icons' ostensible endorsement of the salad. Tennis champion Venus Williams also jumped on the salad bandwagon.[41]

Additionally, nutritionist Dr. Rovenia Brock was also enlisted to "help spread the message of balance creation nationwide to key influencers and McDonald's customers nationwide--particularly African American families." This marketing tie-in along with celebrity endorsements is part of McDonald's broader effort to include African Americans among its "key" marketing demographics.[42] Targeting this audience had already been an important business strategy, however, as in March 2005, McDonald's announced an offer to pay hip-hop artists in exchange for plugging Big Macs in their songs. In response, BusinessWeek commentator David Kiley wrote, "I happen to think McDonald's, for all the flack it gets about the childhood obesity problem, has a perfect right to sell Big Macs. But here's where the logic of this hip-hop plan jumps the rails for me. McDonald's just kicked off a campaign to advertise healthy eating and promoting physical activity to couch potato kids. Statistics are pretty clear that the obesity problem is especially bad among minorities in urban neighborhoods, arguably because there are more fast-food joints in poor neighborhoods than produce stands and good quality supermarkets."[43]

The chain also worked with Oprah Winfrey's personal trainer, Bob Greene. The result was the "Go Active! American Challenge with Bob Greene", which had Mr. Greene visiting 36 cities, "to talk to consumers about balancing exercise with healthy eating and living habits." according to PR Week. The campaign "garnered more than one billion media impressions for McDonald's and helped defuse negative publicity from the film Super Size Me." The Go Active! Adult Happy Meal was jettisoned soon after it had delivered the desired halo effect of positive feelings about the chain after its introduction in 2004.[44]

Enlisting "Moms"

In June 2007, Advertising Age reported that McDonald's was recruiting mothers as "quality correspondents" to observe and report on its operations, in an attempt to deflect criticism that its fast food makes children fat. In a message sent to "mother-oriented social networks and freebie product sites" McDonald's offered mothers a chance at "behind-the-scenes access to the farms [where] our fresh ingredients are grown." The winning mothers "are expected to participate in as many as three 'field trips' lasting two to three days, and receive payment for 'reasonable travel expenses.'" A McDonald's spokesperson said the company will then give mothers "avenues to be able to share their findings."[45]

McDonald's opened its "moms' quality correspondence" PR campaign in early June 2007, meeting with the six mothers "at the company's global headquarters in Oak Brook, IL," reported PR Week. "Future interactions will include a visit to a beef supplier in August and a 'farm field' and produce supplier in September. ... The moms will also get the chance to work behind the counter of McDonald's in Oklahoma City."[46]

According to McDonald's public relations executive Tara Lazarus Hayes, mothers "will get to see first-hand how menu items are made, and ask our executives tough questions about nutrition." They also get a "sneak peek" at a "product due to launch next year." The campaign was geared to help neutralize criticism about fast food and childhood obesity. Ms. Hayes added, "We're also hoping to dispel that McJob image. We understand the mom-to-mom dialogue is important because they listen and influence each other."[46]

She explained that McDonald's hopes "the misperceptions they had and myths that are out there will be debunked by their experience." The mothers will write about their experiences" and have them posted, unedited by McDonald's, online at McDonaldsmom.com."[46]

Nutrition Shell Game

In March 2004, prior to the release of the movie Super Size Me, McDonald's announced its intention to stop supersizing fries and sodas. The company claimed the change was part of an overall plan to revamp its menu.[47] Merely eliminating the "supersize" 7 oz. french fries while maintaining the "large" 6 oz. portion is still significantly larger than the original 2.4 oz. size fries McDonald's first served in the 1950s, however. Soda sizes would still range from 12 oz. to 32 oz.[48] Moreover, although the supersized soft drinks were removed as menu items, the products remain available as a "promotional option" for franchises. During a one-month promotion in Chicago, for example, McDonald's customers who bought a Big Mac and fries could get a free 42-oz beverage. For a Coke that means 410 calories and 28 teaspoons of sugar. Anna Rozenich, a spokesperson for McDonald's, insisted that this was not supersizing but was giving the franchises flexibility to promote larger sizes if competitors were offering larger sizes.[49]

In 2003, McDonald's salads, one of the company's touted "healthy" items, were among the worst offenders on a nutritional analysis of fast-food salads conducted by the Physicians Committee for Responsible Medicine (PCRM). PCRM noted that all of the corporation's salad entrees contain chicken and concluded that all the salads "may very well clog up your arteries." The Bacon Ranch Salad with Crispy Chicken and Newman's Own Ranch Dressing was awarded "the dubious distinction of having the most fat of any salad rated. At 661 calories and 51 grams of fat, this salad is a diet disaster," with "more fat and calories and just as much cholesterol as a Big Mac."[50] Soon after the study was released, McDonald's revised its nutrition facts to list all of the salads without chicken as an option.

McDonald's also updated its "Happy Meals" to combat charges that it was turning young people into loyal Big Mac and McFlurry fans. "Happy Meal Choices" gives parents the options of replacing french fries with "Apple Dippers" and Coke with apple juice or milk.[51]

Encouraging Kids to Get Fit!

In January 2005, McDonald's Chief Creative Officer Marlena Peleo-Lazar told a government panel concerned with food marketing to children that Ronald McDonald had morphed from "chief happiness officer" into an "ambassador for an active, balanced lifestyle" and was visiting elementary schools to tout exercise.[52]

Ronald also got a makeover to look more active in June 2005, trading in his trademark yellow jumpsuit for sportier garb. McDonald's also introduced a new program called "Active Achievers" in the fall of 2005 to "deliver educational messages to students about nutrition, and balance between eating right and staying active."[53] McDonald's PR also announced a program called Passport to Play, which was distributed to 31,000 schools and seven million children. But according to Psychologist Susan Linn, co-founder of the Campaign for a Commercial-Free Childhood, McDonald's has no place in schools:

"This is another marketing ploy. The notion that children need Ronald McDonald to get them to enjoy exercise is bogus. Given the opportunity, kids naturally like to be active."[54]

Menu Labeling

In 2006, McDonald's announced its intention to place nutrition information on the packaging of most of its menu items to combat in part criticism of the voluntary system of menu labeling that relegated much of this information to brochures or company websites. McDonald's called the move "the latest transparency initiative information to help customers make informed choices."[55] Critics contend that seeing the calories on the wrapper of a cheeseburger you've already purchased is ineffective.

Only thirty years earlier, in 1975, however, McDonald's had fought off a federal proposal to require nutrition labeling on packaging, using much the same language that critics of the 2006 announcement were using to point out the limitations of the packaging approach. Despite expressing profound distaste for the idea of menu labeling in the 1970s, McDonald's reluctantly agreed to make nutrition information available through in-restaurant brochures. McDonald's also claimed that they had decided to give out nutrition information voluntarily, without mentioning that they had been forced to do it by the attorneys general in New York, Texas and California.[56]

In 1990, McDonald's (and the rest of the fast food industry) managed to successfully exempt itself from the Nutrition Labeling and Education Act's updated "Nutrition Facts" law, which required that all packaged foods be labeled with specific nutrition data. The industry's sway over lawmakers was so great that they managed to escape the Food and Drug Administration (FDA)'s labeling rules. McDonald's continues to combat putting nutrition information on menu boards. According to CEO Jim Skinner, doing so would be too complex and slow down service.[57]

"Pledging" to Do Better

In 2006, McDonald's joined the Children's Food and Beverage Advertising Initiative, launched by the Council of Better Business Bureaus, which asks participating companies to"pledge" to shift a portion of their advertising intended for children under 12 to healthier choices.[58] The McDonald's pledge, released in July of 2007, included:

Directing 100 percent of national advertising to children under 12 to furthering "the goal of healthy dietary choices";

Advertising either the four-piece Chicken McNuggets Happy Meal or Hamburger Happy Meal as the healthier option;

Limiting the use of licensed characters in the promotion of healthier choices (or) placing its food on any program directed at kids.[59]

In May of 2008, McDonald's created a supplemental pledge that added more meals to the list of advertised foods that qualified as "healthier options."[60] McDonald's defines "healthier choices" as those under 600 calories, a high calorie meal for a child under 12. In November of 2008, McDonald's received an award for multicultural advertising from the Association of National Advertisers for a television commercial that featured children under 12 waving bags of McDonald's food.[61] The ad, which clearly targets children, offers particular insight into the boundaries and exceptions made by the "pledge."

Countering "Super Size Me"

Early in 2004, Morgan Spurlock released the documentary film Super Size Me, in which he ate three meals a day at McDonald's and gained 25 pounds. The title of the film is a play on the now abolished McDonald's "Super Size" menu option. In May, when the documentary was slated for release in 35 theaters in the U.S., Walt Riker, McDonald's Vice President of Corporate Communications, told PR Week that the company was "responding aggressively because the film is a gross misrepresentation of what McDonald's is all about." According to PR Week, McDonald's had been promoting its global nutritionist Cathy Kapica, with the company pleased to report that she had been quoted in the Chicago Sun-Times and the Los Angeles Times and appeared on CNN, CNBC, and in an Associated Press story. The trade magazine also reported that McDonald's had released both a video news release and an audio news release and that "an aggressive independent third-party response" would be issued by the American Council on Science and Health (ACSH).[62] ACSH's Ruth Kava had a column published on Tech Central Station. In response to the film, Soso Whaley, an adjunct fellow with the the Competitive Enterprise Institute (CEI), launched her own 30 day McDonald's only diet:

"This anti-corporate, anti-fast food take on the 'evil' McDonald's is nothing more than simple junk science and should be relegated to the comedy section at Blockbuster once it is distributed. To be honest, I've had it with all the doom and gloom, alarmist, anti-everything attitude of certain individuals and organizations who want to control my life, your life, everyone's life with little regard for individual tastes, freedom of choice and personal responsibility.

"My real purpose is not to prove something, rather, I see this as a unique opportunity to explore food and weight issues and separate the wheat from the chaff when it comes to what is reported about our health and well being in the media and other sources."[63]

While Ms. Whaley claimed her project was not not out to "prove something," the media headline from CEI the day before her 30-day project was:

"Filmmaker to Challenge Fast Food Perceptions: Will Eat at McDonald's for 30 Days and Lose Weight."

The criticisms of Mr. Spurlock by others allowed McDonald's to appear disinterested in responding to the issues raised in the film. According to Riker:

"We see no reason to respond to Morgan Spurlock when so many other experts have already spoken out on the film's distortions and irresponsibility, including those consumers who voluntarily are conducting their own independent 30 day McDonald's diet to disprove his over-the-top behavior."[64]

However, the company's U.S. Head of Communications, Michael Donahue, and Patti Temple Rocks of the Golin Harris PR firm, credited "McDonald's proactive efforts around the balanced lifestyle theme" (in particular, the Go Active! campaign) with blunting the movie's impact on sales. Rocks told PR Week, "It's not a coincidence that the movie has had virtually zero financial impact.[65]

McDonald's in Australia filmed three commercials that disputed some of the claims in the film. Super Size Me grossed the highest opening weekend takings for a documentary in Australian history. Spurlock claims he consumed 13.5 kilograms of sugar and 5.5 kilograms of fat, while his weight increased by 11.25 kilograms. McDonald's Australia was the first McDonald's in the world to use advertising to publicly attack the movie. The strategy had been to ignore it, but research from customers indicated that McDonald's silence might be taken as an admission of guilt, according to The Age.[66]

General Media and Ad Campaigns

Polluting MTV

McDonald's hired marketing firm Maven Strategies to help get "Big Mac" name checked into upcoming songs in 2005, according to Advertising Age. Maven Strategies had previously gotten Seagram's Gin mentioned in five rap songs by artists including Kanye West, Twista, Franchise Boys, and Petey Pablo.[67]

Ad Boycott against Air America Radio

McDonald's has refused to advertise on the progressive Air America Radio. In October 2006, around 90 companies, including McDonald's, told ABC Radio Networks that they did not want their ads to play on radio stations that carried Air America Radio.[68][69][70]

Product Placement on Morning News Shows

In July 2008, the Las Vegas Sun reported that, for two weeks, "two cups of McDonald's iced coffee (BUY!) sit on the Fox 5 TV news desk, a punch-you-in-the-face product placement (BUY!) to chase down your morning news" on local station KVVU. The "punch-you-in-the-face product placement" agreement lasted six months. KVVU's news director claimed that the "nontraditional revenue source" wouldn't impact his station's reporting.[71] But an executive with the marketing firm that negotiated the deal, Omnicom's Karsh/Hagan, told the New York Times that "the coffee cups would most likely be whisked away if KVVU chooses to report a negative story about McDonald's." McDonald's has similar product placement agreements with "WFLD in Chicago, which is owned and operated by Fox; on KCPQ in Seattle, a Fox affiliate owned by the Tribune Company; and on Univision 41 in New York City." Other stations owned by KVVU parent Meredith Corporation, "including WFSB, the CBS affiliate in Hartford, Conn., and WGCL, the CBS affiliate in Atlanta -- are also accepting product placements on their morning shows." [72]

Animal Welfare Issues

PETA's McCruelty to Go campaign: McDonald's chicken suppliers.

In 1999, McDonald's was nominated by Business Ethics Magazine for its' prestigious Business Ethics Award. However, the magazine decided not to grant them the award due to animal welfare issues and concerns. According to an open letter from the judges:

"We must express concern about slaughterhouse cruelty by McDonald's suppliers. ...Federal standards require that 100 percent of cows be fully stunned before they are skinned, but (according to) a McDonald's training video ...it's acceptable if five cows in every 100 are conscious while skinned and dismembered. It's inhumane to allow animals to suffer in this manner. And the real error rate may be far more than 5 percent ...In the case of chickens, U.S. Department of Agriculture (USDA) recommendations say they should have at least 2 square feet of space, yet McDonald's suppliers allow only .55 square feet‚Äînot enough space for a chicken to spread one wing. In addition, birds are bred to grow so large, their legs can't bear the weight, and they suffer painful leg deformities. Surely it's not asking too much to change policies, so that these animals are granted a modicum of comfort." [73]

Although McDonald's referred to itself as an "industry leader in animal welfare", the editors were aware of McLibel. In 1997, when Chief Justice Roger Bell of the British High Court in London returned his lengthy findings, he cited McDonald's as "culpably responsible" for animal cruelty. An Appeals Court judge agreed, "Keeping large numbers of chickens in close confinement inevitably leads to disease ...The high density is intentional and unnecessary. ...In my judgement it's cruel." McDonald's is largest purchaser of beef and the second largest purchaser of poultry in the United States. [74]

"McCruelty to Go" Campaign

In 1997, People for the Ethical Treatment of Animals (PETA), contacted McDonald's to request that the company take several specific steps to reduce unnecessary animal suffering. PETA offered both assistance and a public acknowledgment of the company's leadership in reducing animal suffering; if only they would follow through on its prior stated "commitment to animal welfare." For two years, PETA engaged in a series of frustrating discussions and negotiations with McDonald's. During this time, McDonald's continued to insist in counter campaigning that "industry practice" only seemed cruel to the "inexperienced observer" and was actually "for the animals own good". Furthermore, their critics "simply did not understand animal welfare".

Dr. Temple Grandin has designed the systems in meat processing plants for nearly half the cattle in North America and is McDonald's livestock handling consultant. When she was asked for her input, she indicated that with almost no effort, the corporation could require suppliers to hire two stunners. This simple measure would markedly decrease the number of animals who are skinned and dismembered alive. The company chose not to do so. She also noted that the current methods of catching chickens for slaughter caused a high incidence of trauma (broken wings and legs). Dr. Grandin pointed out British incentives which were in place to reduce trauma incidents. McDonald's also ignored this advice, in spite of lip service to the Associated Press that:

Another consultant informed McDonald's that there were reliable sources of humanely raised cows and pigs if the restaurant chain would commit to purchasing them. Their response was that they were "already the leader in animal welfare issues." After two years of frustrating discussions, PETA launched its international McCruelty to Go campaign in 1999.[76], [77]

McDonald's Overseas

International Branding

In a November 2007 commentary, Demosthink tank fellow Benjamin Barber claimed that McDonald's was one of several "classically 'American' brands" that, due to increasingly negative perceptions of the United States around the world, was "running away from Brand USA to preserve their image abroad." (Other brands he mentioned were Coca Cola, Nike and General Motors.) In France, McDonald's "bought the rights to Asterix. These days, it's this famous Gallic comic book icon, and not Ronald McDonald, who is selling Big Macs in Paris." [78]

"McLibel" Trial in Great Britain

The McLibel trial is the infamous British court case between McDonald's against a London postman (David Morris) and gardener (Helen Steel). The trial ran for two and a half years, the longest in British history. The Judge's June of 1997 verdict was a devastating blow for McDonald's. The ruling found that the company's misleading ad campaigns "exploit children." Also, that it was 'culpably responsible' for cruelty to animals. Furthermore, McDonald's was ruled to be 'antipathetic' to unionization and paid their workers low wages. However, the Judge also rule that Mr. Morris and Ms. Steel had failed to prove all of their points. The High Court ruled McDonald's had been libeled and awarded the company ¬£60,000 in damages, later reduced to ¬£40,000 on appeal. The pair refused to pay and McDonald's reportedly did not pursue it. In March of 1999, the Court of Appeal made further rulings against McDonald's in relation to heart disease and employment.[79] As a result of the court case, the campaign mushroomed, the press coverage increased exponentially and the McSpotlight website was born.[80] The campaign also produced a 60-minute documentary.

After the verdict, the "McLibel Two" took the British Government to the European Court of Human Rights, on the grounds that British libel laws were oppressive and unfair. They also defended the rights of private citizens to publicly criticise multinational corporations.[81] In early May of 2004, the court admitted Ms. Steel and Mr. Morris' claims that the McLibel trial breached their rights to a fair trial and freedom of expression (articles 6 and 10.) In February of 2005, the court ruled that the pair had not received a fair trial guaranteed under the [[[Human Rights Convention]], due to lack of legal aid available to libel defendants. Also that their freedom of expression had been violated. They were awarded ¬£24,000 in damages, plus costs. [82]

Other News and Controversies

Tort Case Over Burns From Hot Coffee

"Spilled Coffee" Trailer

McDonald's still finds itself embroiled in the controversy centering around the "spilled coffee" tort case, more formally known as Liebeck v. McDonald's Restaurants, the full details of which can be read here.

On June 27, 2011, HBO released a movie titled "Hot Coffee," a movie which it describes as "examin[ing] the dangers of tort reform using the now infamous legal battle that began over a spilled cup of coffee to investigate what's behind America's zeal for tort reform‚ which threatens to restrict the legal rights of everyday citizens and undermine the entire civil justice system."[83]

Key Executives and Pay

CEO Compensation Jumps while McDonald's Struggles

McDonald's 2014 revenue was $27.44 billion, down about 2 percent from the year before.[3]The Wall Street Journal noted that the company was "struggling amid declining sales and menu changes." Nonetheless, in March 2015, McDonald's announced that its former CEO Don Thompson, who retired in February, would "receive $3 million under a one-year consulting agreement" as well as a $192,308 payment "in lieu of a sabbatical" and "up to $25,000 in outplacement services." The base pay for incoming CEO Steve Easterbrook increased 69 percent to $1.1 million, "and his target annual incentive opportunity under the Target Incentive Plan is rising to 160% of base salary from 100% of base salary."[85]